MGNREGA employment in Telangana hits 5-year low: Report flags shrinking workforce

Hyderabad: LibTech India's latest MGNREGA Tracker for Telangana showed a significant contraction in employment generation during FY 2025–26 compared to the previous year, the lowest performance recorded since FY 2020–21. The report takes on added significance given the broader policy context with the proposed Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission Gramin (VB-GRAM G) framework, which seeks to repeal MGNREGA, along with tightened technological requirements such as mandatory NMMS attendance and eKYC compliance, which may be adversely affecting scheme performance in the state.

According to the LibTech report key indicators point to a sharp decline across the board. Households employed fell by 17.4 per cent and workers employed by 20.3 per cent, while households registered saw a slight decline of 1.6 per cent. Person-days generated dropped steeply at the start of the year and remained significantly depressed in both proportional and absolute terms throughout, before showing a modest recovery in the final three months of the fiscal year.

District level trends of employment revealed that the loss occurred across the districts with the majority of the districts recording a significant drop in employment. This indicates that the employment drop was consistent across the state. The temporal patterns reveals a consistent person-days loss across the first three quarters with the first quarter facing a severe drop in employment.

Although the last quarter improved slightly, it could not compensate for the employment loss in the first three quarters. However, a positive marginal increase in the last quarter is significant when viewed against the transition period of MGNREGA to VB-G RAM G. Telangana’s shrinking workforce was evident when deletions exceeded additions in the state as against the national level trend. This shrinking base of the workforce suggests that the decline in employment is not only due to reduced work availability but also a decline in workforce participation.

“Due to low employment generated in terms of person-days and average person-days per household, the total wage earnings as well as average household earnings significantly dropped despite an increase in average received per day. More importantly, SC and ST workers borne the loss of nearly 40 per cent of the total wage earnings loss in the state,” said Chakradhar Budha of LibTech India.

Gayatri Saranya of LibTech India said that taken together, the simultaneous decline in employment generation, workforce participation, and wage earnings points to a systemic weakening of the programme during FY 2025–26.

“These trends should be viewed in the context of broader administrative, technological, and policy changes, including the transition following the repeal of MGNREGA. Ensuring adequate and consistent availability of work will be critical to sustaining its role as a source of income security, particularly for vulnerable rural households during this period of transition,” said Gayatri Saranya.

Key Findings

Quarter 1 saw a drastic 48.8 per cent drop which then continued in Quarter 2 with 27.9 per cent and Quarter 3 with 20.4 per cent drop. However the Quarter 4 recorded a slight increase of 2.1 per cent, it could not recover the loss occurred in the previous quarters.

MGNREGA’s crucial Q1 period recorded a loss of 477.26 lakh person-days while Q2 and Q3 recorded a loss of 16.61 and 5.45 lakh person-days when compared with FY 2024-25. Q4 recorded a slight gain with 3.29 lakh person-days.

The decline of person-days was spread across all districts. Every district saw decline in person-days with 28 out of 32 districts recording a drop between 30 per cent to 57 per cent when compared with FY 2024-25. Along with drop in household registers, deletions exceeded additions as opposed to national level trends.

Net deletion of 0.83 lakh Job cards and 4.02 lakh workers in contrast to the national level trend where additions exceeded deletions. Despite a rise in average wage earned, there was a loss of significant household incomes and the total wages earned in the state due to declined employment in FY 2025-26.

Also average household income dropped from Rs 9,770 in FY 2024–25 to Rs 8,766 in FY 2025–26, a loss of Rs 1,004, despite an increase in average wage earned per day from Rs 213.32 to Rs 266.19 in FY 2025-26.

Due to drop in overall employment, total wages earned by workers dropped from Rs 2607.01 crores in FY 2024-25 to Rs 1932.75 crores in FY 2025-26; a loss of Rs 674.26 crores Employment contraction is state-wide and persistent.